Modest Advance for the Market a Day After a Sell-Off

By The Associated Press

May 7, 2015

Stocks rose moderately Thursday in relatively quiet trading, a contrast to the heavy selling that occurred on Wednesday when the chairwoman of the Federal Reserve, Janet L. Yellen, suggested that stock prices might be too high.

The bigger action was in the bond market. United States Treasuries rose sharply in the afternoon, sending benchmark yields lower, a day after a flood of selling.

Ms. Yellen caught investors off guard on Wednesday by saying stock values were generally “quite high.” She spoke in response to a question about risks to financial stability at a conference in Washington.

Fed officials do not usually offer opinions about market levels. In the mid-1990s, stocks swooned after the chairman at the time, Alan Greenspan, used the term “irrational exuberance” when talking about the market.

“Investors remain confused as to where this market wants to go,” said Jonathan Corpina, a managing partner at Meridian Equity Partners.

Many investors agree that the United States stock market is trading at stretched levels. Quarterly corporate earnings were better than expected, but those expectations were low in the first place.

Now, with Ms. Yellen’s comments, some analysts say stocks are unlikely to advance much further. Investors are paying about $17 for every dollar of earnings in the Standard & Poor’s 500-stock index, not excessively high but still above the $15 that investors have historically paid for similar results.

“This market just feels tired. I just see us moving sideways for a while,” said Wayne F. Wilbanks, chief investment officer at Wilbanks, Smith & Thomas in Norfolk, Va., which manages about $2.4 billion in assets.

The Dow Jones industrial average rose 82.08 points, or 0.5 percent, to close at 17,924.06, effectively erasing the losses from the previous day. The S.&P. 500 rose 7.85 points, or 0.4 percent, to 2,088, and the Nasdaq composite index rose 25.90 points, or 0.5 percent, to 4,945.54. With Thursday’s gains, the major indexes are down between 0.6 percent and 1.2 percent for the week.

The next big thing on investors’ plates will be the April jobs report, which comes out on Friday. Economists expect that employers added 215,000 jobs in April and that the unemployment rate fell to 5.4 percent. The March jobs report was much weaker than Wall Street had anticipated, so economists and investors are going to be looking for any significant revisions to the previous numbers.

The bond market had a neck-twisting day as bond prices rose sharply. The yield on the 10-year Treasury note fell to 2.18 percent from 2.25 percent late Wednesday, an unusually large move. The price rose 20/32, to 98 14/32 from 97 26/32.

Among individual companies, shares of Whole Foods Market lost $4.65, or 9.7 percent, to $43.07 a day after it reported first-quarter sales growth that was weaker than analysts had expected.

Yelp shares rose $8.79, or 23 percent, to $47.01 after The Wall Street Journal reported that the company was exploring a sale.

In energy markets, oil fell more than 3 percent because of gains in the United States dollar, which makes oil more expensive for holders of other currencies.

United States oil dropped $1.99, or 3.3 percent, to $58.94 a barrel. That was its biggest drop since April 8. Brent crude, a benchmark for international oils used by United States refineries to make gasoline, fell $2.23 to $65.54 a barrel.

The dollar rose to 119.77 yen from 119.45 yen. The euro fell to $1.1269 from $1.1348.

The price of gold fell $8.10 to $1,182.40 an ounce and silver fell 21 cents to $16.30 an ounce.

A version of this article appears in print on , on Page B4 of the New York edition with the headline: Wall Street Up in Quiet Trading, While Bond Prices Jump . Order Reprints | Today’s Paper | Subscribe

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